Where HR Goes Wrong--and What To Do About It

I began that blog by saying that this was the book I’d
been dreaming about for years. Yes, it is an important book. But it doesn’t go
far enough in highlighting the role of strategic business thinking as the core
focus of company human resource management. Rather than framing the problem as six
competency issues, the book would have generated a lot more insight about both
the weakness and the solution to the typically secondary HR role in the
contemporary corporation. Those of us who’ve consulted at numerous Fortune 100
and 500 companies are well aware that HR often, perhaps inrvitably, lacks
significant political clout. That’s a terrible shame because the truth is that
HR can make the difference between business success and failure for most any
firm.

The future impactThe authors clearly state, in the first page, that the
purpose of their book is to support the alignment, integration and innovation
of HR practices in individual and organizational performance. A couple
paragraphs later they dissect their statement into three questions:

What should HR professionals be, know, and do to
be seen as personally effective?

What should HR professionals be, know and do to
improve business success?

What should HR departments focus on to improve
business performance?

They also make clear from the get-go that by business
they refer to the company’s business, not merely the objectives of the HR
department. They then proceed to examine six competencies to respond to those
questions, emphasizing the role of “strategic positioner.” In that chapter they
spend six pages discussing how to think and talk about the business’ strategic
positioning. This is the richest part of the book, but there is much more to be
learned about the strategic impact that HR can have upon the work force and the
business.

What is to be
done?HR from the Outside In purports to be a cutting-edge, strategic book, but the description of the strategic focus,
challenge and need is far more detailed than the brief chapter that addresses
strategic positioning. This disconnect goes to the very core of why the
discipline of HR exists in the first place. Until HR addresses that most basic
issue in laser-like focus, attitude surveys, case studies, abstract conclusions
and competency discussions will likely have marginal impact.

Sure, strategy
has become an over-used buzzword and gotten lost in the business jargon. Many
of us know that IBM’s former CEO, Lou Gerstner, pooh-poohed strategy and went
for tactics. Gerstner was talking out of both sides of his mouth, for strategically,
he completely changed the business—and its customer, enhancing his firm’s long-term
success and profitability. From the very outset, that was a strategic move.

At bottom, the truth is that far too few understand
strategy, and that’s a problem. Indeed, half-a-dozen years ago, Christian
Mitreanu asked in an MIT Sloan Management Opinion whether it was a bad word? He
didn’t get around to a rarified definition of strategy, but he made an
important point: strategy must include an ongoing cultivation of understanding
the business’ customer, which is at the heart of the matter.

The ever-astute Roger Martin detailed this customer focus
in a brilliant blog on strategy, entitled The
execution trap. But at the least every HR manager and exec needs to put
Michael Porter’s article, What is strategy? on the permanent front lobes and make certain that
every HR move ties either directly or indirectly into the firm’s business.
Porter argues that strategy rests on a unique set of activities that delivers a
unique mix of value to the chosen customer niche. But you can memorize the rest
of his seminal article.

Now, why did I quickly summarize the meaning of strategy
and point my readers to three articles? Very simple: over thirty years of
consulting, I’ve become convinced that very few companies have a valued
strategy—yeah, strategy is tough to create and execute—and it’s a rare bird in
any company that really understands his firm’s customer and his firm’s business.

What this means is that everybody in HR needs to be able
to talk, create, think and execute HR tactics that tie directly into his firm’s
strategy. That’ll mean that HR folk argue, fuss, disagree, collaborate
and contribute magnificently to every single damn business discipline,
beginning with their CEO. So what Ulrich
needs, desperately, is example after example after example where his readers
are shown exactly how HR’s every move ties directly into the firm’s strategy. Ulrich
and colleagues should know enough about adult learning to realize that two-or three
examples ain’t enough—and that the strategic competency need to be drummed into
every HR reader’s head. The other five competencies should all be subsumed
under strategy.

Until that happens, HR will continue to be a dead-end, talking
about sets of HR competencies, and existing for its own sake, much like
technology, glorying in its toys, existed for its own sake well into the
‘nineties.

The good news is that if HR reframes the challenge, it
becomes an opportunity. HR can help build institutions that enable more of us
to achieve our potential, differentiating us from machines, providing us with
more job challenges and harnessing the people-power to set very big things in
motion. And, oh yeah, then we’ll sit at the right hand of the CEO.

I began that blog by saying that this was the book I’d
been dreaming about for years. Yes, it is an important book. But it doesn’t go
far enough in highlighting the role of strategic business thinking as the core
focus of company human resource management. Rather than framing the problem as six
competency issues, the book would have generated a lot more insight about both
the weakness and the solution to the typically secondary HR role in the
contemporary corporation. Those of us who’ve consulted at numerous Fortune 100
and 500 companies are well aware that HR often, perhaps inrvitably, lacks
significant political clout. That’s a terrible shame because the truth is that
HR can make the difference between business success and failure for most any
firm.

The future impactThe authors clearly state, in the first page, that the
purpose of their book is to support the alignment, integration and innovation
of HR practices in individual and organizational performance. A couple
paragraphs later they dissect their statement into three questions:

What should HR professionals be, know, and do to
be seen as personally effective?

What should HR professionals be, know and do to
improve business success?

What should HR departments focus on to improve
business performance?

They also make clear from the get-go that by business
they refer to the company’s business, not merely the objectives of the HR
department. They then proceed to examine six competencies to respond to those
questions, emphasizing the role of “strategic positioner.” In that chapter they
spend six pages discussing how to think and talk about the business’ strategic
positioning. This is the richest part of the book, but there is much more to be
learned about the strategic impact that HR can have upon the work force and the
business.

What is to be
done?HR from the Outside In purports to be a cutting-edge, strategic book, but the description of the strategic focus,
challenge and need is far more detailed than the brief chapter that addresses
strategic positioning. This disconnect goes to the very core of why the
discipline of HR exists in the first place. Until HR addresses that most basic
issue in laser-like focus, attitude surveys, case studies, abstract conclusions
and competency discussions will likely have marginal impact.

Sure, strategy
has become an over-used buzzword and gotten lost in the business jargon. Many
of us know that IBM’s former CEO, Lou Gerstner, pooh-poohed strategy and went
for tactics. Gerstner was talking out of both sides of his mouth, for strategically,
he completely changed the business—and its customer, enhancing his firm’s long-term
success and profitability. From the very outset, that was a strategic move.

At bottom, the truth is that far too few understand
strategy, and that’s a problem. Indeed, half-a-dozen years ago, Christian
Mitreanu asked in an MIT Sloan Management Opinion whether it was a bad word? He
didn’t get around to a rarified definition of strategy, but he made an
important point: strategy must include an ongoing cultivation of understanding
the business’ customer, which is at the heart of the matter.

The ever-astute Roger Martin detailed this customer focus
in a brilliant blog on strategy, entitled The
execution trap. But at the least every HR manager and exec needs to put
Michael Porter’s article, What is strategy? on the permanent front lobes and make certain that
every HR move ties either directly or indirectly into the firm’s business.
Porter argues that strategy rests on a unique set of activities that delivers a
unique mix of value to the chosen customer niche. But you can memorize the rest
of his seminal article.

Now, why did I quickly summarize the meaning of strategy
and point my readers to three articles? Very simple: over thirty years of
consulting, I’ve become convinced that very few companies have a valued
strategy—yeah, strategy is tough to create and execute—and it’s a rare bird in
any company that really understands his firm’s customer and his firm’s business.

What this means is that everybody in HR needs to be able
to talk, create, think and execute HR tactics that tie directly into his firm’s
strategy. That’ll mean that HR folk argue, fuss, disagree, collaborate
and contribute magnificently to every single damn business discipline,
beginning with their CEO. So what Ulrich
needs, desperately, is example after example after example where his readers
are shown exactly how HR’s every move ties directly into the firm’s strategy. Ulrich
and colleagues should know enough about adult learning to realize that two-or three
examples ain’t enough—and that the strategic competency need to be drummed into
every HR reader’s head. The other five competencies should all be subsumed
under strategy.

Until that happens, HR will continue to be a dead-end, talking
about sets of HR competencies, and existing for its own sake, much like
technology, glorying in its toys, existed for its own sake well into the
‘nineties.

The good news is that if HR reframes the challenge, it
becomes an opportunity. HR can help build institutions that enable more of us
to achieve our potential, differentiating us from machines, providing us with
more job challenges and harnessing the people-power to set very big things in
motion. And, oh yeah, then we’ll sit at the right hand of the CEO.